IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with AMERELLER
1. Legal System 1.1 Legal System and Judicial Order Iraq’s legal system is civil law-based and uses a three-level civil court system, which comprises the courts of first instance, courts of appeal and a court of cassation. The judiciary is regulated by Judicial Organisation Law No 160 of 1979. A separate judiciary exists for the Kurdistan Region, which instead applies Judiciary Authori - ty Law No 23 of 2007. Unless otherwise express - ly indicated, references to any law, instruction or regulation in this guide are to statutes as applied in Federal Iraq. The civil courts have jurisdiction over all natu - ral and juristic persons as well as the govern - ment, unless otherwise provided by law. Cases in the courts of first instance are presided over by one judge and may be appealed at a court of appeal, subject to certain exceptions. The court of cassation is the highest court and is located in Baghdad. The Kurdistan Region has its own court of cassation, located in Erbil, which follows the same structure as that of Baghdad. In addition to the above courts, the Iraqi Consti - tution established a Federal Supreme Court to determine the constitutionality of laws, interpret the constitution and rule in disputes between the federal and regional governments, as well as other constitutional matters. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments Foreign companies looking to invest in Iraq may benefit from tax breaks and other privileges under Investment Law No 13 of 2006 by applying for an investment licence. The law does not con -
tain a list of activities eligible for the licence, but it does exclude certain sectors that are regulated by different laws, such as oil and gas extraction and production, banking and insurance. How - ever, it is worth noting that it is not necessary to obtain an investment licence in order to operate a business in Iraq. The Kurdistan Region of Iraq passed a separate Investment Law No 4 of 2006 on Investment in the Kurdistan Region and has its own investment authority. 2.2 Procedure and Sanctions in the Event of Non-Compliance The application for obtaining an investment licence contains the following: • a request form from the Investment Authority; • a confirmation letter from an accredited bank regarding the investor’s financial situation; • a list of projects inside or outside of Iraq; • details of the investment project and eco - nomic feasibility; and • a timeframe for project completion. The Investment Authority will review the appli - cation and, if approved, will authorise all the required licences and permits to be issued. Only a limited number of investment licences have been granted since the enactment of the Investment Law, partly due to the fact that the investment licence is not required in order to do business in Iraq. 2.3 Commitments Required From Foreign Investors The authorities require foreign investors to meet certain conditions, such as a higher minimum capital for certain sectors and a minimum per - centage of locals to be hired. Investors must also keep proper audited records in accordance with
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